This credit card can destroy your debts

This is the best credit card on the market - and there's a clever way you can use it to destroy your debts!

It's not easy to get credit nowadays. So news that The Virgin Money MasterCard has increased the interest-free period on its balance transfer deal to 16 months provides a silver lining to a pretty dark credit card cloud.

We examined the pros and cons of this card last year, and after careful scrutiny, gave it an overall thumbs up.

Since then, however, Virgin's school report has acquired some blemishes. Several readers have complained about sudden APR hikes and direct debits that have failed to reach their destinations on time.

So is this card worth getting?

Destroy your debts

If you're unfamiliar with the Virgin Money card, it offers the best balance transfer deal out there, giving you 16 months (2.98% fee applies) interest free on any transfers made within the first 60 days.

This is great for anyone who wants to take a debt breather, and as this article shows, can save you a packet in interest - even after forking out a balance transfer fee.

What about purchases?

Sadly, Virgin has reduced its 0% offer on purchases from six months to just three.

This is a blow to anyone looking for a breather on purchases.

Still, unlike the majority of credit card providers, Virgin does not operate negative payment hierarchy during the purchase promotional period. So, as long as you pay off the debt within three months, you won't be hit with any extra nasty charges.

Just remember that after this period, normal state of play resumes, so be sure to cut up the card after the first three months to avoid running up any unnecessary interest payments.

A clever way to use this card

Another thing I like about the Virgin card is that it allows you to transfer part of your credit limit as cash to pay off a loan or overdraft.

Just be aware that Virgin will charge you a high money transfer fee of 4% for the privilege of transferring cash into your account.

However, there is a way round this.

Lateral cash injections

When you get a new card, you'll also receive a couple of credit card cheques in your welcome back. Normally, we'd tell you to stay well away from these, as they attract interest rates of up to 30% per year.

However, for the first 60 days, any credit card cheques you use also qualify for the 0% balance transfer deal. You'll also be charged a lower fee of 2.98%.

So, if you have an overdraft that's badly in need of a cash injection, instead of making a money transfer, why not write a cheque to yourself and deposit it into your current account?

Transferring money in this way will save you over £50 on a £5,000 transfer. Winner!

Whatever you do, don't take money from a cashpoint. These withdrawals will not qualify for the promotional rates, and if you make this mistake you will be charged an obscene 27.9% APR.

If it all seems too complex, the Egg Visa card also offers a money transfer facility for a fee of 3%. However, the interest free period only lasts until 1st June 2010 (that's just under 14 months).

Of course, nothing in this world is free, and as well as the initial fee, when your deal is up, the interest rate you'll pay on any remaining transfers will rocket to 18.6% (20.6% for money and cheque transfers), which can be quite a shock to the system if you've been enjoying 0% deals.

And one lovemoney.com writer discovered that her flexible friend was a little too friendly, with Virgin quickly bombarding her with text messages asking her to borrow more.

Bear in mind Virgin is also part of the MBNA group, so you may not be accepted if you already have an MBNA card, and even if you are, you will not be able to transfer balances directly from other MBNA cards.

If you already have a Virgin card, both HSBC and Abbey offer 0% on balance transfers for 15 months (2.9% and 3% fees apply respectively), plus 0% on purchases for three months.

However, neither look to usurp Virgin's place at the top of the best buy tables any time soon, and the card retains its crown yet again.

Get a full verdict on the Virgin Money card by watching our video!